Kenya Power's net profit for the year ending June 30, 2024, was KShs. 30 billion. The increase in energy sales revenue and lower financing costs as a result of the Kenyan Shilling's strengthening relative to major world currencies were the primary drivers of the increased profitability.
It is estimated that electricity sales increased by 21% to KShs.231.12 billion during the year as compared to KShs.190.98 billion in the previous year. This gain can be attributed to both increased economic activity, especially in the manufacturing sector, and improved sales, mainly from the 447,251 new consumers that joined the grid during the year. At 5.1% and 5.5%, respectively, the commercial and industrial and domestic customer groups saw the largest increases in sales.
In comparison to the previous period's expense of KShs.16.87 billion due to loan revaluations, finance expenses declined by KShs.24.84 billion, mostly due to an unrealized foreign exchange gain of KShs.7.88 billion. Since the US dollar and the euro account for over 90% of the company's loan portfolio, the Kenyan shilling's appreciation versus these currencies was the cause of this gain.
Last year, the cost of the power purchase was KShs. 143.58 billion; this year, it was KShs. 150.61 billion. This increase was fueled by the high exchange rate that was in place earlier in the fiscal year as well as extra units that were bought to meet growing demand.
Power purchases are primarily paid for in foreign currencies, even though the company's income are fully denominated in Kenyan shillings. According to Dr. (Eng.) Joseph Siror, managing director and CEO of Kenya Power, the strengthening of the Shilling in the second half of the year resulted in a rise in sales costs that was less than the growth in revenue, which helped to boost the company's gross margin.
Operating expenses also increased from KShs. 37.28 billion to KShs. 46.28 billion over the previous year.
A 92% increase in wheeling charges for the growing transmission network and the hiring of more technical personnel to support commercial operations are the reasons for this increase. Dr. (Eng.) Siror stated, "We strive to maintain stable margins despite inflationary pressures through careful cost management and zero-based budgeting."
Kenya Power has established major focus areas that will direct its business operations and continuously provide value to its shareholders in order to maintain profitability over the medium term. Customer-centricity, operational excellence, financial sustainability, and human capital development are among the strategic focus areas.
"We will concentrate on carrying out the high-impact projects and initiatives outlined in our Strategic Plan, making sure they have all the resources they need as we foster an operational excellence culture among our employees." "We want to create a prosperous future that benefits all stakeholders involved in our mission by empowering our teams and attaining significant results," Dr. (Eng.) Siror, stated.